Econet has put Kwesé, its Ugandan subsidiary, on sale after the Zimbabwe-based media company was last month put under administration due to failure to service debt obligations.
The company, according to Bloomberg, an online news agency, acting through its administrators - Ernst & Young – at the weekend placed newspaper adverts in Zimbabwean media, notifying prospective investors and creditors that it would oversee offers for all or part of the company’s shareholdings in its subsidiaries including in Uganda.
Mr Ben Mwine, the Kwesé Uganda general manager, who was out of the country, at the weekend said the administrators are in search of investors with the hope of sustaining the broadcaster on the market.
“We are having discussions with potential investors and we believe within the next weeks or months, we should know the way forward. Currently, the administrator [Ernst & Young] is handling the entire process,” he said, noting that they were trying to make “sure that we give the business a good chance and sustain the product because it has potential not only in Uganda but in other markets”.
Econet, Bloomberg indicated, will also sell its interest in Botswana, South Africa, Zimbabwe, Lesotho, Zambia, Nigeria, Rwanda, Tanzania, Malawi, Mauritius, Ghana, Kenya and Dubai.
The media company, trading in Uganda as Kwesé TV, was launched in the country on October 17, 2017, joining a highly competitive market that is largely dominated by Multichoice products - GOtv and DStv, from South Africa - and Chinese StarTimes.
Last month, the company was put under administration and Ernst & Young was appointed to manage the process.
Mr Joseph Hundah, the company’s chief executive officer, said then they were holding talks with creditors to rescue the business.
Reports indicate that the company had also earlier said it would close due to an acute scarcity of foreign currency in Zimbabwe.
At the close of last year, Kwesé Uganda announced a change of business strategy hinging its future on digital technology.
The company, after a year of launching, shifted its pay TV segment from broadcasting through decoders to internet streaming and free-to-air broadcasting.
Early this month, Kwesé announced a shutdown of its African pay-TV arm days after the company sent out messages to Kwesé Play subscribers, notifying them that Econet would no longer offer the service.
Mr Godfrey Mutabazi, the Uganda Communications Commission executive director, under whose regulation Kwesé Uganda falls, told Daily Monitor at the weekend that whereas he had seen the notice of sale in international media, the Commission was yet to receive a formal notice of the proceedings.
“In Uganda, they have not yet approached us on the sale,” he said.
However, Mr Mwine noted the company was cognizant of its responsibility “as a licensee and as such will keep UCC appraised on any developments”.
Tough Pay TV Market
Uganda, according to UCC’s December 2018 report has eight licensed pay television stations.
Pay TV subscription base increased in December in 2018 to 2.1m people from 1.1m in January that year.
While the subscriber base rose by 82.6 per cent, the players in the market are still struggling.
Leading Pay TV, Multichoice in its 2019 annual report noted that it is working to reduce trading losses in its operations in the rest of Africa, excluding South Africa.
The pay TV also revealed that it had faced tough economic conditions due to foreign exchange losses.
“In Africa, tough economic conditions prevailed and foreign exchange rates in our markets depreciated on average around 10 per cent against the dollar. More significant depreciations were experienced in Angola (60 per cent), Zambia (17 per cent) and Ghana (11 per cent) while inflation levels remained elevated in many countries,” the report reads in part.